Section 206C of the Income Tax Act
Income-tax Act, 2025: s.394
Section 206C of the Income-tax Act, 1961 corresponds to section 394 (Collection of tax at source) of the Income-tax Act, 2025.
Read section 394 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 206C is Kourani v. Union OF India (83 Taxmann.com 137), cited in 1,708 of the 269 judgments on BharatTax that turn on this section.
Leading authorities on Section 206C
The fee under Section 234E for late filing of TDS/TCS statements cannot be levied retrospectively by processing an intimation under Section 200A for defaults occurring before the amendment allowing such processing.
The levy of fees under section 234E for delayed filing of quarterly TDS returns is confirmed as per the binding precedent of Conceria International (P.) Ltd. The court also considered that Section 200A(1)(c) was not introduced during the Assessment Years 2012-13.
Profits attributable to a Permanent Establishment (PE) in India can be conservatively estimated, such as by applying a percentage of global profits to Indian sales, when the PE's activities in India are minimal.
A technical breach of filing a statutory form, such as Form 27C, can be condoned. No liability under section 206C(6A) or 206C(7) can be fastened on the assessee if the statutory form is filed, even if not furnished in time.
An assessee should be granted the benefit of a declaration filed at the appellate stage, even if delayed, as appeals are a continuation of assessment proceedings. The delay in filing declarations under section 206C(1A) should not be a ground to deny the benefit to the assessee.
Late fees under section 234E can be levied for belated TDS returns filed, and processed, on or after June 1, 2015, in line with amendments to section 200A.
The levy of late fees under Section 234E of the Income-tax Act is illegal for TDS returns concerning periods prior to June 1, 2015. This is because Section 234E does not apply to assessment years before this date.
Delay in filing a buyer's declaration under Section 206C of the Income-tax Act, 1961, does not empower the Assessing Officer to deny the benefit of the declaration to the assessee.
